In debate over luring business, governments can never win

Last month, the Mecklenburg County (N.C.) Board of Commissioners awarded SPX Corp. a $3.1 million grant over five years to build a 230,000 square-foot office building in Charlotte and purchase two new aircrafts.

It was an incentive from a program — the Business Investment Program, to be exact — through which the city and county help businesses pay for expansions here.

Some people call such incentives a bad idea, a fat waste of public money that could be spent on fighting crime, building roads or improving the school system. Others think incentives are vital to attracting and keeping companies at a time when an incentives race is going on in communities across the country.

You can’t help but feel bad for government leaders, who are stuck in the middle of this debate.

It’s a damned-if-you-do, damned-if-you-don’t scenario.

Imagine if the county had not awarded SPX, a local manufacturing company, any incentives. Lancaster County, S.C., reportedly offered the company more than $40 million in incentives to land the expansion.

If Lancaster County had won the expansion, there probably would have been public outcry against Mecklenburg commissioners, who would have been accused of doing nothing to snag the expansion. Indeed, the public comments section of media outlets’ websites would have featured nasty comments about do-nothing Mecklenburg politicians and threats to never vote for them again (all written using really bad grammar and misspellings).

Still other people might be thinking right now that public money shouldn’t have been given to SPX, that it was a government giveaway to a major company with deep pockets.

So, no matter what path government takes when it comes to incentives, it will never please everyone.

But whether you support incentives or not, this much you have to agree with: We live in an era in which many businesses expect communities to compete in wooing them.

Businesses’ expectations of incentives have led to nonstop competition to see who can offer the best ones. A vivid example is the film industry, which many states, including North Carolina, are trying to get a piece of. As a result, communities have been upping the ante, offering better and better incentives, giving filmmakers a lot more location options than Hollywood for shooting their projects.

But take this line from a Jan. 4 posting on nashvillescene.com:

“One of the biggest concerns in Tennessee’s film industry is how to compete for work with states that offer lucrative tax incentives to land film and TV projects. Not just goliaths like New Mexico, which dangles a 25 percent tax rebate as well as interest-free loans up to $15 million per project, but also neighbors such as Georgia and North Carolina.”

Some government officials sound like their hands are tied when it comes to offering incentives, that they have no choice but to.

“I wish that incentives didn’t exist,” John Allen, economic development director for the county, said recently. “I would like nothing better than Charlotte and Mecklenburg to compete for businesses based solely on the quality of the transportation system, the quality of the work force and quality of life.”

Incentives won’t just go away, unless they were created with expiration dates.

Instead, public bodies will have to eliminate them.

The question is: Which state is going to get rid of its incentives first?
— Deon Roberts is the editor of The Mecklenburg Times, a Charlotte, N.C., newspaper owned by The Dolan Company.

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